Government rolls back decision on tightening PF withdrawal norms

Hyderabad: Buckling under protests, the government on Tuesday revoked the order tightening rules for withdrawal of provident fund money, within hours of keeping it in abeyance for three more months.

“The notification issued on 10 February 2016 is cancelled. Now the old system will continue,” Union labour minister Bandaru Dattatreya said at a press conference Hyderabad.

“I will take ratification from CBT (Central Board of Trustees of EPFO),” he said after violence rocked Bengaluru for the second day when garment industry workers torched several buses and attacked a police station protesting against the tightening of rules.

Giving reasons for the rollback, Dattatreya said, “The reason is the request of trade unions. The earlier decision (to tighten the PF withdrawal norms) was also taken by the opinion of the trade unions. Now, when the trade unions are requesting, then we have rolled back the decision.”

Earlier in the day in New Delhi, the minister had said, “The notification (tightening PF withdrawal norms) will be kept in abeyance for three months till 31 July 2016. We will discuss this issue with the stakeholders.”

Dattatreya said employees and workers need not have any misconceptions in the wake of the cancellation of the notification. The decision would have barred withdrawal of the employer’s contribution from the PF money till the age of 58 years.

In a placatory move, the labour ministry also said it was contemplating permitting withdrawal of all accumulations by Employees’ Provident Fund Organisation’s (EPFO) subscribers on grounds like purchase of house, serious illness, marriage and professional education of children. The matter has been referred to law ministry for clearance.

People have also launched online campaign against the decision, which was to be implemented from 10 February but was later put on hold till 30 April.

Protesters pelted stones at Hebbagodi Police Station in Bengaluru and torched seized vehicles parked there, as the spontaneous agitation with no trade union leading it spun out of control.

Police said they had to resort to lathicharge and fire teargas shells to disperse violent protesters. At least two Karnataka State Road Transport Corporation buses and one of Bengaluru Metropolitan Transport Corporation have been set on fire, they said.

Incidents of stone-pelting on buses and other vehicles were reported from different parts of Bengaluru such as Bannerghatta and Jalahalli cross, as also near the Electronics City, the hub of IT firms. Traffic jams were reported at various entry and exit points in the city like Hosur Road, which leads to Electronics City and Tumkur Road, which has a large concentration of garment units.

In a bid to assure the agitating workers, Union minister Ananth Kumar, an MP from Bengaluru, said the right of unorganised and garment workers would be restored and appealed to them to withdraw their protest.

City Police Commissioner N.S. Megharikh said the situation was under control, but there “are some issues” on the city’s outskirts. “…we are at work, our officers are at the spot, reinforcement has already gone there. The situation is being brought under control,” he said.

Police said other workers too have joined garment workers in the protest today. There are approximately over 12 lakh garment factory workers in Bengaluru, the city police chief said. Workers opposing amendment to EPF Act have expressed fear that the new rule would take away their right over employer’s contribution portion of provident fund till they attain 58 years.

In February, the ministry had issued a notification restricting 100% withdrawal of provident fund by members after unemployment of more than two months, among others. Following the concerns raised by trade unions and other stakeholders, the ministry decided to keep the notification in abeyance till 30 April. Its implementation has been again deferred till 31 July, as per a labour ministry statement.

Now, the EPFO subscribers who are out of job for more than two months can file for full and final settlement of provident fund till July end.

“On the direction of labour minister, the said provision will now come into effect from 1 August, 2016 by issue of an amended notification,” the statement said.

The proposal to amend the scheme to allow all accumulations on different grounds like purchase of house, serious illness, marriage and professional education of children, has been sent for vetting by the law ministry.

The unions have been demanding complete rollback of the decision tightening the PF withdrawal norms.